If a company were to set up an allowance account, what would be the journal entry for the initial set up?
If a company were to set up an allowance account, what would be the journal entry for the initial set up?
Homework Answers
Answer
-- the allowance account is a Contra asset account which has a normal credit balance.
-- to setup Sachin account account has to be credited.
-- the proper and complete entry for the initial setup of the allowance account would include:
>A debit to bad debt expense account, and
>A credit the allowance account.
--hence if a company were to setup an allowance account the journal entry for the initial setup would include a credit to the allowamce account.
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If a company were to set up an allowance account, what would be the journal entry for the initial set up?
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